Exploring Three Stocks Poised for Long-term Growth Exploring Three Stocks Poised for Long-term Growth

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By Ronald Tech

Investors are often advised to seize the moment when stocks dip, enabling a more frugal entry into the market. But every now and then, an opportunity presents itself to ride the wave of a soaring stock. While a correction could loom on the horizon, the greater risk lies in missing out on the upward momentum. Identifying these exceptional moments is the key to successful investing.

Home Depot: Building on Strength

The housing market outlook appears bleak on the surface, with declining interest in new homes and renovation projects. Yet, amidst this backdrop, retail giant Home Depot (NYSE: HD) is scaling new 52-week peaks. The reason? Investors are looking ahead, foreseeing a surge in home buying and remodeling demand.

Reality paints a different picture – a housing shortage exacerbated by population growth and limitations on new construction. Home Depot’s industry dominance positions it ideally to capitalize on this pent-up demand.

While recent financial results may not align with this narrative, the tide is turning. With easing headwinds, Home Depot is set to dominate the expanding home improvement sector, fueled by lower interest rates and stabilizing supply-demand dynamics.

Coca-Cola: The Classic Choice

Coca-Cola (NYSE:KO) is a staple in many portfolios, hovering near its all-time high. Known for its reliability, the beverage giant is a beacon of stability in turbulent times.

While not a growth powerhouse, Coca-Cola’s consistent revenue and earnings trajectory make it a resilient investment. With 62 consecutive years of dividend increases, the company’s unwavering payout sustainability underpins its appeal.

Owning a portfolio of renowned beverages beyond its eponymous soda, Coca-Cola’s market reach and brand power ensure it remains a steady performer even in a slow-growth environment.

Microsoft: Software Strength Unleashed

Software titan Microsoft (NASDAQ: MSFT) enters the market with momentum, poised for sustained growth in the coming decades.

Dependence on Microsoft’s software suite by students, businesses, and individuals worldwide remains robust, with its products ingrained in daily operations. Moreover, Microsoft’s foray into cloud computing positions it as a major player in this rapidly expanding field.

With a significant share of the global software market and a stellar presence in cloud computing, Microsoft’s future appears bright, making it a compelling long-term investment choice.

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"Over time, it takes just a few winners to work wonders." -- Warren Buffett, from the 2022 Berkshire Hathaway letter to shareholders

One big winner can make a fortune. No one knows this better than the Oracle of Omaha.

Take Apple, one of Buffett's most famous investments. A $50,000 investment, made in 2007 -- the same year the iPhone debuted -- would have grown to a cool $3.5 million today, a mere 17 years later.

Are there any stocks out there today with that type of potential? Of course. Here are three that might have what it takes.

Image source: Getty Images.

Microsoft: The Giant's Stride in AI

Topping the list is Microsoft (NASDAQ: MSFT). The company that made former CEOs Bill Gates and Steve Ballmer some of the richest men in the world is once again the largest company on the face of the Earth with a market cap topping $3 trillion. And thanks to its many artificial intelligence (AI)-related ventures...

Let's start with the company's cloud services business. It's already a massive moneymaker for Microsoft, generating $25.9 billion in its most recent quarter (the three months ended Dec. 31, 2023). That makes it the second-largest cloud services vendor globally, trailing only Amazon Web Services.

As AI usage ramps up, Microsoft stands to benefit from increased cloud services. Indeed, after decelerating some in 2022, cloud spending appears to be reaccelerating as organizations explore how AI can improve their processes and generate efficiencies.

In addition, Microsoft's longstanding partnership with OpenAI, the company behind ChatGPT, makes Microsoft a major player in the race to develop the next AI breakthrough.

Microsoft has multiple pathways to riches on the AI front. Given its outstanding track record and excellent management, Microsoft could be one AI stock that makes many fortunes going forward.

CrowdStrike: Safeguarding Fortunes with AI

Next is CrowdStrike (NASDAQ: CRWD). While nowhere near the size of Microsoft, CrowdStrike is still likely to make a number of fortunes in the coming years, thanks to its cutting-edge AI-powered cybersecurity offerings.

The company runs perhaps the premier cybersecurity platform available today, which protects networks, endpoints, and data through add-on modules that are tailored to its customers' needs...

Financially, CrowdStrike is rocking and rolling. In its most recent quarter (the three months ended Oct. 31, 2023), the company reported $786 million in revenue, up 35% from a year earlier. Moreover, annual recurring revenue (ARR)...

In short, this means CrowdStrike is growing its subscription base, through bringing in new customers and by upselling additional security modules to existing customers.

At any rate, the company's solid growth points to big things ahead, as the number of cyber threats continues to grow -- meaning CrowdStrike's growth curve could extend for many years to come.

Nvidia: Riding the AI Wave to Great Heights

Last, but by no means least, is Nvidia (NASDAQ: NVDA). Let's face it: No company or stock has ridden the AI wave better or to greater heights than Nvidia. The company is now America's third-largest public company...

Exploring the Meteoric Rise of Nvidia in the Tech MarketThe Unstoppable Ascendancy of Nvidia in the Tech Market




Investing in Innovation: A Bright Future for Microsoft Stock

Microsoft’s financial performance has been on a consistent upward trajectory, with both top and bottom lines showing steady growth. This trend is not surprising given the shift towards renting software and services instead of outright purchasing.

Embracing New Opportunities

What sets Microsoft apart is its remarkable ability to adapt to emerging trends and capitalize on new opportunities. Twenty years ago, cloud computing was not a mainstream concept, and the Xbox gaming console did not exist a quarter-century ago. Even five years back, the idea of monetizing artificial intelligence seemed like a distant dream. Yet, Microsoft’s Copilot Pro, catering to paying subscribers seeking enhanced productivity, is now a reality.

The company’s innovation journey is far from over. Despite uncertainties about its next big venture, Microsoft’s track record and indispensable technology make future growth prospects highly optimistic.

The Future Outlook for Investors

For those considering investing in Microsoft, the potential for long-term returns looks promising. The company’s commitment to innovation and proven ability to stay ahead of the curve positions it as a compelling choice for a 20-year investment strategy.

Opportunities Beyond Microsoft: A Cautionary Tale

While Microsoft shines as a beacon of innovation, it’s crucial to consider other investment options. For instance, Coca-Cola may not hold the same promise of exponential returns as evidenced by Motley Fool Stock Advisor‘s top stock picks, which exclude Coca-Cola. This underscores the importance of exploring diverse investment avenues for optimal returns.

The Stock Advisor service, renowned for its investment insights, has significantly outperformed the S&P 500 since its inception in 2002. This success highlights the potential benefits of diversifying investment portfolios with trusted guidance and expert recommendations.

Amidst the evolving landscape of investment opportunities, Microsoft stands out as a beacon of innovation and resilience, offering investors a promising path towards long-term growth.

*Stock Advisor returns as of September 30, 2024